Market Insights 25 August 2020

Market Overview 

The buying pressure around the single currency is picking up pace on Tuesday amid the US-

China trade optimism and pushing EUR/USD higher in the 1.18 neighborhood. The better mood 

in the financial markets is acting as a drag on the safe-haven US dollar. The focus will be on the 

German IFO – Expectations index. 

Gold is reporting marginal gains during Tuesday's Asian hours. Gold’s immediate bias will 

remain neutral while prices are held within the $50 range defined by Monday’s high of $1,962 

and Friday’s low of $1,912. 

EUR/USD

The latest advance of EUR/USD fell short of reverting the bearish tone of the pair, according to 

intraday technical readings. The 4-hour chart shows that the pair met sellers around a bearish 

20 SMA, also settling below a flat 100 SMA.  

Technical indicators, in the meantime, recovered from near oversold readings but failed to 

regain positive ground, now stable within negative levels. The risk is skewed to the downside, 

with further declines expected on a break below the 1.1760 support area. 

GBP/USD

The GBP/USD pair is ending the day in a relevant support area, somehow suggesting a bearish 

extension for this Tuesday. 

The 4-hour chart shows that the pair retreated after testing a bearish 20 SMA, while technical 

indicators have turned flat within negative levels, after a failed attempt to retake positive ground. 

From the current level, the pair has an immediate support level at 1.3010, with a stronger one at 

1.2980. 

USD/JPY

The USD/JPY pair is offering a neutral stance as the day comes to an end. In the 4-hour chart, the 

pair has spent most of the day between its 20 and 100 SMA, both maintaining modest bullish 

slopes. 

Technical indicators, in the meantime, remain directionless around their midlines. An immediate 

support area comes around 105.45, with a steeper decline expected once below it. Bulls could 

take their chances on a break above 106.20.

AUD/USD

AUD/USD is off the highs but holds gains above 0.7150 amid the risk-on mood. The pair is 

moving upward alongside the ascending trendline. The 20 DMA turns flat during the Asian 

session.  

The support of the pair is near 0.7140. The resistance is around the monthly high 0.7275. 

XAU/USD

The yellow metal carved out a long-tailed hammer on Friday and an inverted hammer on Monday 

in D1 chart. In other words, Friday’s low is the level where buyers stepped in, while Monday’s 

high marks a price point where buyers failed to absorb selling pressure. 

As such, $1,962 and $1,912 are key levels to watch out for this week. A break above $1,962 would 

signal a range breakout and open the doors to $2,000. On the other hand, a move below $1,912 

would expose the low of $1,863. 

XTIUSD

Unless breaking a short-term ascending triangle, currently between $43.42 and $41.65, oil prices 

are likely to remain compressed. 

The quote’s another attempt to slip below 200-bar SMA level of $41.30 can’t be ruled out. In 

doing so, 50% and 61.8% Fibonacci retracement, respectively near $41.60 and $41.00, will be on 

their radars. On the flip side, buyers will wait for a clear break of nearby resistance line, at $42.92 

now.